What is 'Quasi-Reorganization'

A relatively obscure provision under U.S. GAAP which provides that under certain circumstances, a firm may eliminate a deficit in its retained earnings account by restating assets, liabilities and equity in a manner similar to a bankruptcy. A firm's stockholders must agree to allow the accounting change, which essentially resets the firm's books as though a new company had incurred the assets and liabilities of the old firm.

Explaining 'Quasi-Reorganization'

Although the idea of quasi-reorganization has seen some renewed interest, the provision is still rarely applied in practice. The idea of quasi-reorganization holds appeal for some as the idea of a "fresh start" is more exciting to investors than slowly digging out from a large deficit of retained earnings. Some also argue that quasi-reorganization could be an effective method of more accurately resetting the accounting balances of a firm when a serious drop in asset values is not adequately reflected. Quasi-reorganization remains highly controversial, however, since it is not truly a change of economic reality, but rather a method to make books appear more favorable.

Further Reading

Quasi reorganization and current value accounting in thrift industry
search.proquest.com [PDF]
… The concept of quasi-reorganization then was developed to ensure that the capital revaluation was undertaken … regulations or norms, those that are com- patible with their particular economic, social, and … that there was a net write-up of intangible assets for the whole economy …

Quasi-Reorganizations in Reverse
www.jstor.org [PDF]
… The concept of quasi-reorganization then was developed to ensure that the capital revaluation was undertaken … regulations or norms, those that are com- patible with their particular economic, social, and … that there was a net write-up of intangible assets for the whole economy …

How to avoid bankruptcy
search.proquest.com [PDF]
… The concept of quasi-reorganization then was developed to ensure that the capital revaluation was undertaken … regulations or norms, those that are com- patible with their particular economic, social, and … that there was a net write-up of intangible assets for the whole economy …

Financial Reporting And Auditors' Opinions On Voluntary Liq
search.proquest.com [PDF]
… The concept of quasi-reorganization then was developed to ensure that the capital revaluation was undertaken … regulations or norms, those that are com- patible with their particular economic, social, and … that there was a net write-up of intangible assets for the whole economy …

Quasi-reorganizations
search.proquest.com [PDF]
… The concept of quasi-reorganization then was developed to ensure that the capital revaluation was undertaken … regulations or norms, those that are com- patible with their particular economic, social, and … that there was a net write-up of intangible assets for the whole economy …

ANALISIS PENILAIAN SAHAM PT. SIERAD PRODUCE TBK PASCAKUASI REORGANISASI
repository.ugm.ac.id [PDF]
… The concept of quasi-reorganization then was developed to ensure that the capital revaluation was undertaken … regulations or norms, those that are com- patible with their particular economic, social, and … that there was a net write-up of intangible assets for the whole economy …